OVERVIEW

BHP Billiton believes that the risks of climate change associated with increasing greenhouse gas

concentrations in the atmosphere need to be addressed through accelerated action. The actions

should aim to stabilise concentrations at levels guided by the research of the United Nations

Intergovernmental Panel on Climate Change. Behavioural change, innovation and technological

progress are necessary to achieve stabilisation in a manner consistent with meeting natural resource

and energy needs. Building on our earlier efforts, we will take action within our own businesses and

work with governments, industry and other stakeholders to address this global challenge and find

lasting solutions consistent with our goal of Zero Harm.

Our actions focus on four areas:

1. Understanding emissions from the full life cycle of our products.

2. Improving the management of energy and greenhouse gas emissions across our businesses.

3. Committing US$300 million over the next five years to support low emissions technology

development, internal energy excellence projects and encourage emissions abatement by our

employees and our local communities.

4. Using our technical capacity and our experience to assist governments and other stakeholders

on the design of effective and equitable climate change policies including market-based

mechanisms such as emissions trading.

= Carbon pricing – We require carbon pricing sensitivity analysis to be undertaken in capital decisions

on assets of US$100 million or more or those that emit greater than 100,000 tonnes of CO2 equivalent

per annum.

= Market trading – We trade emissions reduction instruments as a means of managing our emissions

exposure and assisting our customers to manage their exposures.

= Project-based emissions reductions – We will continue to pursue external projects and other

opportunities that deliver tangible reductions in greenhouse gas emissions and generate credits.

3. Working collaboratively with customers, communities and employees to reduce emissions

and support internal emissions reduction projects, we will commit US$300 million over the

period 2008-2012 to:

= Support industry research, development and demonstration of low emissions technologies including

collaborative research dedicated to accelerating the commercial uptake of technologies such as

carbon capture and geosequestration.

= Provide capital funding for internal energy projects with a greenhouse gas emissions reduction

component that might not otherwise be competitive within our normal capital allocation processes.

= Support the efforts of our employees and our local communities to reduce their emissions.

4. Progressing climate change policy within our sphere of influence

Policy makers have a particularly important role in encouraging actions by all stakeholders and ensuring

a fair distribution of the costs of emissions reduction. BHP Billiton is working with governments and other

stakeholders on the development of policies that provide the necessary incentives and tools for effective,

equitable abatement, including:

= Policies aimed at accelerating the cost effective reduction of emissions.

= Support for market-based mechanisms, provided that the measures are efficient, broad-based

(geographically and cross-industry sectors) and are progressively introduced.

Chip Goodyear

Chief Executive Officer

June 2007